Why spending is a taxing question

Article Abstract:

Recent weakness in consumer spending in the UK can be seen as the result of a permanent, unexpected tax rise. There was a very significant rise in income tax payments in 1998 following the introduction of the self-assessment system, and this led to an unusually large fall in household real disposable income. This development is likely to continue to affect growth in consumer spending in 1999. Against this background, the Bank of England's Monetary Policy Committee will probably be able to reduce interest rates by another percentage point by summer 1999.

United Kingdom, Interest Rates, Consumer Expenditures, Taxes, Forecasts and trends, Column

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Cheap provides the cheer when times get tough

Article Abstract:

Supermarket chains and discount retailers in the UK continue to see strong sales as consumer spending comes under considerable pressure from high interest rates, economic slow-down and the absence of the building society windfall payments made in 1997. In contrast, sales of 'big ticket' items such as furniture and computers are declining, and many traditional retailers are struggling. Retail sales were well below retailers' expectations in Jun 1998, according to a Confederation of British Industry survey of the distributive trades.

Supermarkets and Other Grocery (except Convenience) Stores, Grocery stores, Supermarkets, All Other Specialty Food Stores, Discount Chains, Variety stores, Consumer Expend-Household Operation, Retail industry, Retail trade, Discount stores, Households

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